My Response to Kevin O'Leary

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Graham은 초기 자산 단계에서는 분산보다 한 자산(부동산)에 집중 투자하는 것이 낫고, 일정 자산 규모 이후에는 '기반 보호'를 위해 부채 상환과 분산으로 전환해야 한다고 주장. 부동산은 임대료 인상을 천천히 하는 것이 낫고, 캘리포니아 임대료 규제가 자산가치를 해친다고 설명. 주식은 한 종목 5%, 한 섹터 20% 룰을 제시하며 세금 걱정보다 이익 실현이 중요하다고 강조. 마진(신용) 투자는 위험하다고 경고.

다듬은 글

※ 자동 자막 원문(다듬기 전)

01. react to another kevin kevin o'leary who shared some of his money advice with fellow youtuber graham stefan that was unfortunately a cash deal that was the whole thing was a cash deal you couldn't get credit right i didn't have a credit card right so no bank wanted to give a 21 year old a loan because i had no credit history okay so right there um is an important lesson and i tell every millennial even though i don't endorse credit cards it's very hard to advance your credit rating without having one so it's good to get a credit card put maybe a thousand dollar limit on it and then start paying off you know use 200 bucks a month and pay it off every month that is extremely great advice and something that i did when i moved to california to move in with my girlfriend now wife lauren was as soon as i turned 18 i went to wells fargo the only bank who was willing to give me an unsecured credit card and i got my first credit card and i would just buy little packs of gum or little things i paid that thing off like three or four times a month just to do whatever i could to make sure i had no debt on my credit card he mentioned put get a card put 50 to 200 on it every month pay it off every month and cap your limit at one thousand dollars this is actually very good advice because it prevents you from making large and sudden purchases on your card and then kind of getting sucked into the debt trap but you've got to admit you've you've benefited from the appreciation of this one asset class real estate as interest rates went down correct so there is an inherent risk of concentration here your entire net worth is only in real estate so far kevin o'leary is a hundred percent right on when he says hey you've benefited from interest rates going down and that's so true yesterday i made a video saying if you want to keep an eye on when the market's really going to crash in real estate here are the things to pay attention to and in that video i explain the rule of 1 and 10 in real estate which means for every one percent by 10 it's incredible how quickly and real that is consistently so keep an eye on that but let's talk about the concentration aspect that kevin o'leary just brought up we'll see a bit more of this later in the video but kevin o'leary really recommends diversifying and not having everything concentrated in one spot this is where i disagree with kevin o'leary and it depends on which phase of life you're in let me try to explain that sometimes i hear people say kevin i've got ten thousand dollars saved up and i'm so diversified i've got fifteen hundred and gold fifteen 1500 in cash 2 000 in bonds 2500 in stocks and 2 500 in some real estate fund and i'm thinking to myself that's great it's very well diversified if one of those asset classes goes away no problem you still have a ton of your money left over but i defer here when you're early in life and your net worth is ten thousand dollars i would take a completely different approach than what kevin o'leary is recommending i would rather see taking that ten thousand dollars and purposefully doing what graham did and concentrating it into real estate whatever amount of money it is for example when i bought my first house i put ten thousand dollars into a house and turned that into an over six figure amount by buying a property below market value fixing it up in fact you can watch the entire video where i explain this it's called how i turned ten thousand dollars into two hundred thousand dollars in 90 days that's the biggest boost to my net worth almost instantly when you first start out with a very low net worth you're in what i call the building fork of life your goal in my opinion is get off the ground floor concentrate your investments into where you know you can make a lot of money build wealth then once you reach a certain net worth whether that's 200 000 500 000 or a million dollars or whatever number that you feel comfortable with then it makes sense to start protecting the base but when you have zero dollars it doesn't make sense to try to protect the base because you don't really have anything to protect protecting the base is when you actually get off this ride of trying to build your wealth like crazy and you start paying off debt and you start trying to minimize the things that could potentially create risk in your life paying off real estate paying off a margin on stocks whatever creates risk in your business you start paying that off and you protect the base this again it takes you off that growth fork for a bit but that's okay in the future you could always hop back on to the building wealth phase but taking these little pauses to protect the base is extremely important because sometimes what happens is if you stay on this building phase where you always concentrate your investments and you never protect the base then what happens is you keep taking risk on risk on risk on risk on risk and then if things go bad all of it crumbles and you end back up at the starting line it's kind of like you're playing monopoly and it's like go back to the beginning you just lost everything and that sucks protecting the base means if you start taking off again here you protect the base you pay off your debts you have nice passive income that comes in then you decide okay now i'm going to build my wealth again you go back on the building wealth phase you fall back if if worst case you fall back you never fall back to a point that's lower than that base you protected in this case that million dollar net worth number great analogy i met a very very wealthy uh real estate developer in new york that came over with nothing from europe when he was young when he was 18 years old he's a multi-billionaire now and each time he bought a building he did apartments he would call it either a pasta or a protein building and i said what does that mean he said well i start with my first building and i would take a lot of debt down and i would get the rent roll up so i was 100 leased out and i would only eat pasta until i paid off all the debt i said really he said yeah because it was just my wife and i and we had all this mortgage on that building and i got i know what happens during you know cycles and so once they paid off that building and now all the cash flow was coming out of the building with no debt on it he'd start to eat steak that became a protein barrier and his whole life was always making sure that he had enough buildings with no debt on it to sustain the downturns because the new york in those days every seven years would take a dive of 30 so what he would do is he'd always have a couple of protein buildings spinning cash when the correction hit he'd use that cash flow to buy new buildings but he never let he never went bankrupt because he never extended himself so far that the protein buildings couldn't pay off the mortgages you know of the past the building so this is him buying that building he's doing that sprint right that's the concentrated wealth building period of his life where it's like oh man i got a big mortgage i know there's going to be another real estate correction at some point in the future because real estate is cyclical it will go down at some point all right i got a new building let me now go pasta mode and do whatever i can to limit my risk that's the payoff phase notice that that's the pasta phase the payoff phase and then as soon as he got that building paid off he went back okay now we're ready to do a sprint again because like kevin o'leary said if the poopoo hits the fan in this individual's example if the poopoo hit the fan while he's on the sprint he wouldn't necessarily fall back to zero he'd fall back to where he last built his base his support you can think of that baseball field on second base go back to be safe and because the person took his effort to protect his base his additional cash flow from his prior deals actually enabled him to go shopping when these back sets would happen or these crashes would come so he didn't actually even get pushed back instead he had assets that he could use to actually accelerate his wealth at a faster pace because he took a break protected the base and made sure he had extra assets available in the event the market turned this is something that happened to me during the pandemic before the pandemic i was extremely anti-refinancing real estate i had properties that i've owned for seven six years that i hadn't refinanced and they had built up a lot of equity as soon as the pandemic hit right around march 6 march 7th the federal reserve freaked out i called up my lender and i said break the glass let's refinance four to eight buildings i used that cash that i had ready going into a crisis because i knew if we were going into the crisis any kind of crisis cash would be king and so when i had that cash and we hit market bottom around the end of march early april i started buying stocks like crazy and so that's an example of protecting the base is not constantly refinancing and taking on debt on top of debt on top of debt to where you're over extending yourself it's nice to have what i call a little piggy bank that you can break and ha ha i got all this cash that i can now work with and take advantage of opportunities very similar story very very smart all of these by the way are rented under market value i get it but how long are the are the leases for one year and so do you get to bump it up i don't raise rents believe it or not what yeah really really why not um my thought is if i have a really good tenant who always pays on time and no issues i would rather just not raise the rent and keep them there a long time and if they do move out then it's kind of like gravy to me because i'm able to rent it out for even more to the next tenant and then tell them they could stay there as long as they want at that price yeah and for me i've had some tenants now for seven or eight years now here's something that i have to beat graham up on graham lives in california which is a state that has statewide rent control and this even applies for properties that do not have rent control but it's even worse in areas with rent control particularly in areas like los angeles county which have even more strict rent control laws than the statewide rent control here's what happens when you don't raise rents on tenants tenants end up falling behind on market rents now graham said he rents his properties below market value i do that as well if market value is say 2 800 for a unit i might rent it for 27.25 or 2750 because it gives me a choice of the highest quality tenant i have more competition when the price is low and then i get to pick the tenant i want this makes sense but rents should trick up trickle up rather even if it's just a little bit here's a 30 rent increase here's a 40 rent increase i'm not talking about the stupid bait and switches that the big apartment buildings do where they get you in at 2700 and then they give you a 200 rent increase because they're betting on you not wanting to move that's a scam like that's just mean and wrong i'm just talking about a one one and a half percent rent increase every year so that way you keep pace with inflation because here's what happens if you don't let's say you own a duplex and you don't raise the rent for 10 years rent control makes it almost impossible for you to now sell the property for market value see with the coupon code down there i explain the value of multifamily real estate is in the rent you get in rent control areas the problem is even worse because you can't just tell a tenant to move and put a new tenant in at a higher rent and then sell the property you're stuck with the tenant unless you want to negotiate a big fat buyout with them in my county i have to pay one month's rent to get a tenant out and then i can have a new tenant at a higher rent in los angeles county though in lots of cities a tenant can negotiate that amount with you that means a tenant could demand 20 40 50 80 000 to move as sort of a relocation expense because they've locked in this low rent for a decade or seven years or 15 years and so not raising the rents actually severely hurts the market value of your property and makes it harder to sell the property and makes it harder to get a tenant out if you need it to which means you actually create more risk you have less liquidity in your real estate and you're in a very dangerous situation because i'm older than you i've seen a lot of things and i've been through a lot of down cycles lots of my friends got wiped out i mean imagine being in your 40s and being wiped out having to go bankrupt like that changes your life forever because you have that on your back i would never want to wish that on anybody because it is a horrible thing to happen and the only reason it happened to them is they didn't respect debt you're being disciplined you're buying assets that have income they were buying boats and cars and watches and getting divorced they loved their lifestyle they went to zero you have to you have to respect that and you do this makes sense to me but again i go back to that guy in new york protein building past the building and the whole idea of respecting how debt can rip your life apart so true one kevin o'leary tells us something that i talk a lot about in my money course my real estate course and that's the difference between guns and butter when you're on the building wealth phase of life your goal is to actually postpone buying watches and art and boats and big houses in fact lauren and i get asked regularly hey kevin lauren how come it is that if you own all this real estate you don't have a bigger house why aren't you spending on bigger things and that's because we love this pasta protein analogy where it's like hey we'll build wealth we'll buy some good deals in real estate but you know what we're not going to go crazy and ham and go and buy in real estate in this insane way and over leverage everything we're gonna take a pause and we're just not gonna refinance for a bit and we did that for years and we kept a pause and so that way when the pandemic came we were ready to do it and now starting in july i've started doing the same thing again and july i've mentioned ah i'm not i'm not ready to go crazy anymore for example in stocks we're going to pay off and protect that base again in the meantime we're also not spending big on a big new house on watches on boats and things like that because we're so focused on just investable assets it's a great way to go because in the future once we get to this point where we say you know what just pay everything off or sell everything and throw it all into att take my seven and a half percent dividend and just coast we can do that we'll have a very nice number to do that with clearly real estate still remains more than twenty percent of your net worth one of your goals should be over time is to make it to get such a broad portfolio in your net worth that real estate's only 20 so if that asset class really has a hard time it can't take you out of business got it so so right over time though the qualifier get got missed a lot i got so many questions people like kevin you have way more than 20 in real estate so does graham so true but he is correct over time you start paying down then you diversify on the protect the base phase but while you're building your wealth it's okay to concentrate in a safe way of course let's look at this stock market investments individual stocks 1.14 million index funds seven that's good seven hundred seventy two thousand um california state free bonds very good 150 000 silver 12 000 acorns so using acorn that's good yeah i test out all the apps so i could give that's fine okay cash uh 320.

02. that's within the stock market brokerage that's not all cash just so i i continually buy into the market the discipline is every 90 days to trim back anything over 5 percent and put it into something else that you decided to go into what happens to portfolios like this that aren't it's like trimming a hedge no sector more than twenty percent no stock more than five you've got three stocks here over five you give up some of the upside but when the correction hits like a tesla rolls over and goes down 38 you don't take the full hit because you've taken profit out on the trimming i'm worried about taxes yeah and i'm telling i'm telling you that's the biggest mistake you can make in your life is to worry about taxes the fact that you have to worry about taxes is a wonderful thing it means you're making money but to say oh i don't want to sell you know stock that's now 11 of my portfolio because i don't want to take the tax hit you will pay a brutal price for that you will have a massive correction you won't have taken any gains and you will hurt yourself immensely that's the one thing mistake you're making here so you've got to do your work here all right first the 20 and 5 rule 20 uh no no more than no more than 20 of your money in one asset class and no more than five percent in one stock this again perfect when you're in that payoff phase of life if i said all right we've hit a net worth goal it's time to retire and it's time to diversify this is perfect advice and so this is something that a lot of people have mentioned oh my gosh kevin it's like as if he's talking to you because of tesla but in my live streams every morning when i talk to my course members about my stock strategy i invested in tesla heavily going up through around july a lot of my purchases were right between 700 to 900 and these are pre-split figures when tesla started hitting anything above 1500 i said i'm not going to buy heavily anymore i think it's a little too expensive and the stock split was coming and on my channel you'll see videos warning about the stock split a note about the tesla stocks but i've mentioned many videos that i think this is going to be hyped up and it's going to come crashing down i won't buy tesla individually until after that happens and so we hear this 38 speculative in this crash and this sounds so painful but all of my exposure was mostly right before that now that example there is by no means to say that you should go all in on tesla i do think that would be a mistake i would probably dive divide my portfolio out like this 25 tesla 20 other stocks and then 55 real estate not very diversified but i'm also on that growth phase that growth phase where i'm trying to do what i can to buy value and insulate from that any kind of downside risk and then in the future when we decide all right time for payoff mode then we can split it all up using that 25 method it's not bad advice but for the growth phase i disagree with it kevin o'leary talks about taxes hey if you're making money tough problem to have pay your taxes i disagree with that in the growth phase if we get to that phase where it's payoff mode time let's diversify and i start purposefully making less income because maybe i retire hey then at that point i don't have to pay high taxes anyway because my income's not going to be as high then let's slowly start offloading pay some of the taxes at a much lower tax rate are you using any margin no that's the other thing never use margin in stocks never do that never never never never people think margins free when there's a correction you get slaughtered right so right he's absolutely right margin is so dangerous and i think margin is evil in fact i just made a video about how i used margin and found this is evil and i highly recommend you watch that video because it'll teach you a lot about the psychology of margin and the debt on stocks which is so much worse than dead on real estate well there you have it there are my responses some to some of the big things that were in this video if you've enjoyed this check out the programs down below for much more perspective and folks we'll see you next time you